Macy’s (M) Tries to Turn Things Around with Q2 Report

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Macy’s (M) will report its Q2 numbers before the market open August 14. Analysts forecast earnings of $0.46 per share for the quarter, versus $0.70 during the same period last year. M stock is down 34.2% on the year.

Technical Analysis

M stock was recently trading at $19.60 down $22.39 from its 12-month high and $0.10 above its 12-month low. InvestorsObserver’s Stock Score Report gives M a 17 long-term technical score and a 6 short-term technical score. The stock has recent support above $19.75 and recent resistance below $23. Of the 8 analysts who cover the stock 0 rate it Strong Buy, 0 rate it Buy, 5 rate it Hold, 1 rate it Sell, and 2 rate it Strong Sell, M gets a score of 27 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

Macy’s stock has greatly underperformed the market over the last 12 months with shares currently trading just pennies above its 52-week low despite back to back quarters with better than expected earnings and revenue. Macy’s has an earnings problem with profits down 4.3% per annum over the last five years, and analysts expect earnings to continue dropping at an annual rate of 9.7% over the next five years. There is a lot of negativity priced into the stock as Macy’s, but with the stock trading at just 5.5 times earnings the downside is likely limited at this point and a really strong quarter could breathe some life into the struggling stock. Wall Street is weary of brick and mortar retailers, especially mall-based retailers like Macy’s as more and more retail moves online. Macy’s has a strong brand and low valuation, so there is reason to look for upside, but the company has to start delivering better earnings and showing Wall Street it can begin to grow profits in the not-too-distant future. Analysts have an average price target of $23.57 on the stock.

About Macy's Inc

Macy's operates about 690 department stores under the brands Macy's and Bloomingdale's, and more than 180 specialty stores under the names Macy's Backstage, Bloomingdale's The Outlet, and Bluemercury. Macy's also operates e-commerce sites, owns 65% of a Chinese e-commerce joint venture, and licenses two Bloomingdale's stores in the United Arab Emirates and Kuwait. Women's apparel, accessories, shoes, cosmetics, and fragrances constitute approximately 61% of Macy's sales. The retailer has headquarters in Cincinnati and New York City.

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